The insurance industry is not only an extremely stable industry, but it’s also one ripe full of opportunities. At its very core, insurance is about protecting individuals and organizations within your community. The experts in the insurance industry are utilizing the skills that they learn throughout the pre-licensing period every day, and they get to enjoy interacting with people from all walks of life each day. Needless to say, it’s not the boring office job many people chalk it up to being!
Now, if you’ve stepped foot into the insurance world and are curious about how to get even further into it, you might have wondered: how does one start an insurance brokerage in Canada? There are many different brokerages of varying sizes all throughout Canada. How do you get started – and how do you ensure that your business has the potential to thrive? Let’s get into it.
Why Work in Insurance?
First, let’s address why someone would even want to work in insurance, let alone start their own insurance brokerage. A career in insurance offers many opportunities. Working in insurance presents the opportunity to:
- Give back to your community. A career in insurance offers both the opportunity to do meaningful work each day and be involved in the community, protecting them with tailored insurance packages and solutions.
- Try out many different aspects of insurance – marketing, underwriting, customer relations, etc. You can pick and choose which best matches your skills and desires.
- You can develop a broad skill set, since the insurance industry often requires individuals who are good at organization, research, problem-solving, technology, and communication.
- Enjoy job security. Insurance is one of those industries that won’t be going anywhere, even during a recession. There will always be a need for insurance.
- Start with ease. With how many roles there are in insurance, it’s easy to get into.
The Steps to Starting an Insurance Brokerage
As you might expect, there are several steps you will need to follow in order to start your brokerage in Canada. We will break those down in the section below.
Step no. 1: Acquire a level 3 “management” license.
Brokerages will require a nominee or designated representative who can oversee all of the brokers working at your brokerage. This individual must hold a level 3 license in every province that they are licensed in. The level 3 license requires this individual to pass all the exams required to earn both the level 1 and level 2 license, and then level 3 license in your province. What exams are required may vary by province; i.e., Ontario has the RIBO 1, 2 (Technical), and 3 (Management.)
You can also outsource and hire a level 3 licensee on contract to act as your overseeing broker.
Step no. 2: Obtain an insurer contract.
To begin an insurance brokerage in Canada, you must find at least one insurance company looking to give you an ATR, or authority to represent. This means that you will need to obtain a contract that enables you to represent them and sell their insurance products.
To do this, you will first need to present your business plan and make a proposal as to why this insurance company would want to work for you. Maybe you have expertise in some niches that they offer, or you have insights as to how working for you is going to be worthwhile for them. They may require some minimum premium commitments for the first start-up period, or ask about the background of your current team members.
Step no. 2: File the necessary paperwork
After all this is in place, now you will need to go through the formality of filing the registration paperwork with every province that you choose to operate in. Each province has different regulations and rules you need to follow to stay compliant.
Developing a Business Plan
The steps above, while crucial in beginning your brokerage, are only the official steps you need to begin. To create a thriving brokerage that can stand on its own, you will need to carefully craft a comprehensive business plan. Curate a road map for your business, outlining where you are now, where you plan to go, and how you plan to get there. Begin by defining clear goals, and then curate strategies for achieving these goals. With each strategy, ensure that you consider the financial implications, and check to see if your current budget can accommodate these. You may also review this plan with an experienced mentor or a business consultant.
In order to bring your business plan to life, you will also need to secure investors or other financial resources. You may want to tap into personal funds, or look for investors willing to back your venture. You may also consider taking a loan out from a bank.
And, finally, once the financing is in place, explore all your advertising and promotion strategies! Spread the word about your brokerage through digital marketing, such as creating social media accounts, optimizing your site through SEO, etc. Even joining industry organizations and networking with professionals in the field can help boost your venture.
Of course, there’s a lot more to running a business than what we touched on here. There’s hiring staff, training, regular compliance with regulations and laws, and more. But don’t let the many steps deter you – running a brokerage can be extremely rewarding! If a life in the insurance field is what you desire, then make sure to check out AssurUni – Canada’s hub for independent insurance brokers.
AssurUni: A Canadian Hub for Independent Insurance Brokers
AssurUni has been around since 2018 and has served as Canada’s fastest-growing hub for independent damage insurance brokers. Whether you are a broker, an insurance student, or someone in a different career path looking for a business opportunity, we are an excellent home for forward-thinking individuals looking to explore a unique world with unparalleled benefits.
At AssurUni, we offer training programs for individuals looking to fast-track their journey and get AMF certified in as few as 4 weeks. Working with us in the insurance industry also offers tons of flexibility, allowing individuals to build a profitable business while working when and where they want! Insurance can be a full-time endeavour, a part-time job, or even a side-hustle!
Click the link below and get to talking with us about a low risk and high profitability endeavour with AssurUni!